Posted 3 years ago on Nov. 2, 2013, 9:14 p.m. EST by JackHall
(413)
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Two opposing ideas driving the economy: Making Money vs Making Stuff.

After WWII the USA was the only industrial nation whose factories
were still intact. Because America was the only industrial power the US dollar became the reserve currency for world trade. When foreign countries bought our products they had to use US dollars.

While the products were made in the USA the dollar grew stronger.
US labor had to be paid. Our products backed the US dollar. This was because The US made a lot of stuff for the world. Made in the USA meant the products were the best. The American working class made stuff that made money.

Building houses is a solution for both unemployment and economic growth. There is a housing shortage. This leads to inflated rents and housing prices such as a 2 bedroom coop priced at $500K

While trillions of dollars are in circulation there aren't many clues as to how much a dollar is worth. $11.90 will buy a pack of cigarettes in New York; two packs, $4.99 for a pack, in Idaho. It's the same dollar.

Should a 3 BR house be built for $90K, $190K or $290K? The Government should take the responsibility of creating and regulating a national housing program supplying inexpensive modular prefabricated homes so the country can start making stuff on a large scale again to create houses and home appliances and furnishings by Americans for Americans. Surplus houses could be exported.

The shortage numbers may be slightly higher. NYC has a population above 8 million. The average rent here is $3000/mo. The average salary is far less than $120,000. There is a shortage of affordable housing here.

The view from the working population living in NYC apartments sees a bleak future of competing for substandard housing and over priced housing.

The real estate industry view is reflected by the Huffington Post

Huffington Post -

"The current inventory shortage is the result of robust demand driven by an improving economy, improving consumer confidence and household formation, and near-historic housing affordability resulting from low interest rates and home values that remain well below their recent peaks. The good news is that these fundamentals should remain in place in the market for the foreseeable future. The bad news is that supply will struggle to keep pace with demand, at least in the short-term.

As a result, many buyers in the upcoming spring home shopping season may get pulled into bidding wars over what inventory is available, which can be frustrating. The best advice is to remember the value of patience, to understand that more supply will be coming and to not commit to paying beyond one's comfort level in the heat of
negotiations."

Should an American earning the minimum wage be able to afford to own a home?

The real estate markets (banks) want to see housing prices inflated to pre-2008 levels, which was artificially high to begin with. At this point there is no government agency regulating a limit on housing prices though there is a cap on the size of a federally financed home loan..